Professional Contacts

Management accounting is not regulated by the national legislation of a country, but in order to receive full and reliable information, it must be organized in compliance with the generally accepted international principles. The company offers arrangement of management accounting in compliance with the international financial reporting standards: IFRS, US GAAP. The choice of the main accounting system (IFRS, GAAP) depends on the historically predetermined situation in the company, sometimes it is determined by requirements of foreign investors.

The expertise of IDelync’s experts in the field of management accounting and its automation allows to provide the following services:

• Developing a company’s financial structure;
• Building of the model of management accounting, setting up connections and means of exchange with other subsystems: bookkeeping, budgeting;
• Developing the main reporting forms, singling out the key indicators;
• Developing the key records: card of accounts, analytical profiles.

The required stages in a management accounting arrangement project are:

• Preparation of guidelines or recommendations as to arrangement of managerial document flow, regulations on coordinated action of a company’s services;
• Providing consulting support to a company’s employees on issues of implementation of the developed method of management accounting ;
• By arrangement with the Client – assistance in implementation of all developed documents, Company’s regulations.

There is a number of differences between the principles of accounting accepted in certain Russian and international standards.

For convenience, the existing differences can be divided into two groups:

• The first group of differences can be explained by the fact that some rules do not exist in Russia, for example, those related to business combination, depreciation of assets, financial instruments, etc.;
• The second group of differences can be explained by the fact that the Russian Accounting Standards (RAS) and the IFRS have different rules applicable to identical issues, for example, those related to finance lease, reserves, information disclosure in financial statements, etc.

Due to this, when IFRS financial statements are prepared on the basis of the RAS, it is necessary to perform restating. Restating stands for analysis of financial statements adopted by a Russian enterprise, making amendments required for preparation of a comprehensive financial report of the company, which would in general comply with the international financial reporting standards (IFRS, US GAAP).

The full packet of financial statements includes:

• Statement of financial condition (the Balance sheet);
• Statement of total revenue (complex profit and loss);
• Cashflow statement;
• Statement of changes of shareholder equity;
• Key accounting policies;
• Notes to the financial statements;

In the projects involving restatement of financial statements in compliance with the IFRS requirements, IDelync are guided by the principle of individuality of a Client, taking into account the specifics of Client’s activities, prospects of further development and dynamics of capitalisation of a Client’s company.

As a result, the financial statements prepared in accordance with the requirements of international standards may not only be used as financial statements for attracting additional funding or procedures of the company’s capitalization, but also as an instrument for:

• determining strategic key indicators;
• budgeting (planning) procedures in companies;
• financial analysis of attainability of the fixed indicators and assessment of dynamics of a company’s development;
• the mechanism of control of a company’s value.

Apart from financial statements, IDelync provides services of consolidation of financial statements for a group of companies.

The main purpose of preparing consolidated statements is presentation of activities of a holding or a group of interrelated organizations (mother, daughter and independent) as an activity of a single economic unit. A mother company submits consolidated statements in order to objectively and faithfully demonstrate to the owners what their investments are like, that is control and ownership of net assets of enterprises (IFRS 27).

The services of preparation and consolidation of statements may be completed on Client’s request with the services of development of regulations as well as with audit of international and Russian statements.

Management accounting suggests automation of the following areas:

• Budgeting;
• IFRS accounting and reporting;
• IFRS consolidation;
• Analytical management reporting;
• Key indicators and Balanced Scorecard.

The information of operating accounting is the source of primary data for management accounting. This is the very reason why during automating management accounting, it is important not only to build a system of management reporting, but also connect it to the systems of operating accounting excluding the possibility of multiple entry of primary information into different systems. Taking into consideration the fact that nowadays most of Russian companies have solutions in automation of operating accounting based on 1C: Enterprise products, IDelync actively uses products of this family for automation of management accounting. This often  helps not only to set up integration mechanisms fast and in a quality manner, but also fully realize operating and management accounting of a company in a single information solution.

By studying a company’s needs carefully, IDelync’s experts offer variants of solutions for automation of management accounting both on the basis of typical solutions of 1C: Enterprise, and on the basis of proprietary solutions for budgeting and accounting in compliance with the international standards.

Realization of projects of comprehensive automation of management accounting is performed stepwise in the following sequence:

Stage 1. Pre-project examination (analysis).

The purpose of this stage is to indentify and agree with the key experts on business requirements to the system being developed, functionality of the solution and automation project results in general, work out proposals on selection of a platform and configuration for realization of the system. Special attention in development of the system of operative accounting is paid to the issues of potential use of the data of this system as a source for the future system of management accounting.

Stage 2. Preparation of the “Project vision” document.

On the basis of the pre-project examination, IDelync’s experts together with the Client’s key specialists prepare “The Project Vision” document. The purpose of this stage lies in formalization and recording the understanding of the main Project parameters aimed at comprehensive automation of operative accounting, achieved at this stage of examination.

Description of the following sections can be found in the “Project Vision” document:

• The structure of the Solution in terms and objects of the selected platform and configuration;
• The list and description of the realized functional of the Solution as well as deviations from the base performance capabilities of the selected configuration;
• The necessity and the level of integration of the proposed Solution with other information systems (Client-bank, Web-application, OLAP-reporting, etc.)
• Recommendations on provision of (optimization) required hardware and technical resources for optimal operation of the Solution.
• Stages, time-frames and budget of the Project’s realization.
  

Stage 3. Design, setup and adjustment of the information solution.

The following tasks are realized at this stage:

• Methodological adaptation of regulated processes, document flow and reporting;
• Designing changes in the information solution, their realization in the system;
• Setup and creation of a prototype for adjustment and checking of correct realization of accounting and reporting of the obtained solution;
• Initial fill of the information solution (fill of reference data, transfer of the original remainders).

Subsequent to the results of this stage, the information solution is formed on the basis of the selected typical configuration or IDelync’s own decision, adjusted to the needs of the enterprise, in accordance with the current requirements to automation, defined at the stage of Pre-project examination. The obtained information solution is handed over for beta testing.

Stage 4. Beta testing and user consultation.

The purpose of the stage of beta testing is full scale testing of the realized settings and performed adjustment of the information solution, with close support of a Consultant over the whole of the agreed period of time. At this stage the enterprise’s employees are maximally involved into work with the obtained information solution, receiving all required consulting support from the Consultant and learning the peculiarities of work of the information solution.

Stage 5. Productive operation of the information solution and post-project maintenance.

Upon successful completion of the stage of beta testing, an information solution is handed over to productive operation. The enterprise’s experts independently operate the information solution turn to the Consultant only when necessary.

The key to successful realization of an operative accounting automation Project is in the Project’s containing a full list of the Executor’s services: from assistance in realization of current requirements to comprehensive methodological support over the whole duration of the project. This is the reason why the project team from the side of the Executor must include experts in the area of IT, system analysis and financial analysis.

The main objectives of the treasury functions automation are:

• To decrease the labour-output ratio and reduction of the accounting information processing time;
• To increase reliability of information;
• To enable integration with different information data sources;
• To ensure prompt preparation of management reporting;
• To ensure efficiency and immediacy of control.

The main functional capabilities of the management information system of the "ID.Treasury":

1. Preparation and control of implementation of the financial plan;
2. Functionality to create the payment schedule;
3. Drawing up, analysis and approval of the register of payments;
4. Comparative analysis of the financial plan and the register of payments.

 The solution includes the following works:

• Long-term planning of payments – one year, month, week finance plans

Considering the fact that the process of the finance plans preparation involves many services of the company(Centre of Financial Responsibility), the solution allows to prepare finance plan templates in Excel and download them to the treasury module upon the filling of the budget by the supervisors.

• Short-term payments planning – payment schedule, requests for funds application

The payment schedule is created in the system by the Treasurer and is an optimal tool for distribution and payments control on the daily basis taking into account the payment schedule and availability of funds. The Treasurer takes the decision regarding the payments for the next several days on the basis of the Payment schedule, indicating which requests for payment will be finalized on which day and from which settlement account. At the same time, this document is the ground for drawing up the Payment Register document. The document has the functional for fast and convenient correction of payments. Moreover, it features the tools necessary for online processing of the document: group processing (for fast changes in properties of several payments at the same time), operating corrections (changes in the reflection of company’s financial situation in the overall balance) and snapshots (records of the financial condition of the company at a particular moment with further reconstruction of the whole picture for analysis of correctness of work of the financial service in general).

• Storage of the versions of the payment schedule, facilities for their comparison for choosing the best option

The snapshots of the financial condition are intended for saving the interim results of settlement accounts taking into account the payments. The Treasurer, recording the versions, demonstrates the results achieved at the moment of the snapshot. Later, these can be used for analysis of the payments planning process. The reports also allow to choose the snapshots (below referred to as versions) and show the condition of the payments at the moment of the version creation.

• Approval of payments

The approval process takes place upon agreement of all payments. Then the approved payment register is created. The main schedule and registers may have specifying schedules and registers.

The Payment Register is the document to be approved and acts as the final point of payment planning. Upon approval of the document, it is impossible amend the requests for expenditure included into this payment register and payment schedule, on the basis of which the payment register was created.

The payment register contains payments which will be performed on the date of the payment.

Automation of the budgeting process with the use of the ID.Budgeting MIS ensures performance of the following tasks:

1. Drawing up the master budget of the company consisting of the income and expense budget, cash flow budget, payment schedule (operating plan of execution of the cash flow budget), pro forma balance sheet and other budgets. The drawing up of budgets may be performed in accordance with different scenarios on the basis of the target or actual data for the prior periods.
2. Planning of the monetary funding and controlling the financal condition of the enterprise for any period with a breakdown into turnover of individual items using the necessary analytical breakdowns.
3. Controlling the correspondence of the actual data with the set target indicators.
4. Controlling the correspondence of the current schedule of application of resources with the working schedule for the period and analysis of fulfillment of the budget requests.
5. Drawing up consolidated accounts based on the result of monitoring and multivariate analysis of deviations of the actual data from the target indicators.

Additional features of the “ID.Budgeting” MIS:

Integration of the data from the financial accounting information system with the MIS – the actual data of the budgetary accounting is integrated from the financial accounting information systems, which allows to avoid repeated information input.

The automated business process of “Change Management” provides feedback between the budget and the supporting primary accounting documents.

The control of execution of the budget can be performed virtually at any point of the business process of the enterprise. Five main points can be singed out, in which the execution of the budget can be checked and immediate actions aimed at prevention of deviations of the actual indicators from the target ones can be taken.

Reporting. Multipurpose settings of the reports allow to prepare any reports with arbitrary analytical breakdowns and with different level of itemization. Moreover, the use of the required analytical breakdowns allows to assess the efficiency of different business lines.  The plan-fact analysis can be built for each separate budget or a random list of items. This kind of report can be prepared on the basis of separate analytic objects: Centre of financial responsibility, contractor, etc, which allows to itemize the deviations.

Additional distribution procedures. It is not always possible to determine all the required analytics at the moment of posting of the actual dynamics of an item. Distribution into the preset algorithms is provided for this kind of cases. Distributed data is recorded under a different scenario, which allows to compare the data before and after the distribution.